Institutional Tuition Discount by Income: Private Institutions

In 2011-12, on average, institutional grant aid covered almost half of the published tuition and fees for full-time dependent students from the lower half of the income distribution enrolled in private nonprofit four-year colleges and universities.

Figure 2016_13: Published Tuition and Fees, Institutional Discount, and Net Tuition Revenue over Time at Private Institutions in 2011 Dollars, by Dependency Status and Family Income

Notes & Sources

Notes: Family income quartiles are based on all dependent undergraduate students across all sectors in 2011-12. In 2011 dollars, income categories are: lowest: less than $30,000; second: $30,000 to $64,999; third: $65,000 to $105,999; highest: $106,000 or higher. Institutional discount includes institutional grant aid and tuition and fee waivers. Includes full-time undergraduate students who were U.S. citizens or permanent residents. Data for the for-profit sector have high standard errors and should be interpreted with caution.

In 2011-12, on average, institutional grant aid covered 39% ($11,160) of the published tuition and fees for all full-time students at private nonprofit four-year institutions.

Between 1999-00 and 2011-12, published tuition and fees, institutional discounts, and net tuition paid to institutions all rose most rapidly for low-income dependent students. The rise in published prices may be explained either by relatively large tuition increases at the institutions enrolling lower-income students and/or by more lower-income students enrolling at higher-price private colleges.

For-profit institutions give very small discounts to students, so the net tuition revenue they collect is only slightly lower than the published price.

In 2011-12, the average published tuition and fee price facing students in the second income quartile enrolled in private nonprofit four-year colleges and universities was 60% higher than the average price facing similar students in the for-profit sector. However, the net tuition they paid to institutions was 18% lower than the price paid by similar students in the for-profit sector.

The net tuition revenues of institutions — the net tuition paid to institutions — are higher than the total net prices students and families actually pay. Federal and state grant aid and tax benefits, as well as aid from employers and other private sources, help students pay the net institutional prices.

Between 1999-00 and 2011-12, federal grant aid per full-time equivalent undergraduate student more than doubled. Federal education tax credits also increased significantly over these years. These federal subsidies covered part of the increases in institutional net tuition prices facing students in all postsecondary sectors. (Trends in Student Aid 2016)